Kingfisher with no debt, is it time to give back cash
to shareholders?

A

Kevin O'Byrne responds:

I'm delighted that our efforts right across the businesses have
eliminated the £1.6bn of financial net debt that we started this
journey with. It's true we have a much stronger balance sheet now
which means we have options going forward – a nice place to be relative
to the depths of the credit crisis barely two years ago. But it's not true
we are debt free. We lease over 600 of our 856 stores and using a
long-term property yield this equates to additional finance lease debt
of £5.8 billion. Under today's accounting rules these can't be shown on
the balance sheet but we do include this liability when thinking about
our balance sheet and funding.

Our aim is to retain financial flexibility whilst investing in improving and
growing our business for the longer term. We are also keen to share our
cash generation with shareholders and that's why we have increased
our full year dividend by 29% this year, ahead of our earnings growth.
And I would expect us to continue to grow our dividends ahead of
earnings for the next few years so that our dividend cover gently reduces
from 3 times last year to around 2.7 over the medium term, a level at
which we can invest in the business, return cash through dividends
and maintain an appropriate balance sheet gearing.

amount of debt eliminated
over the past three years

Q

Last year you hinted at acquisitions, are you still
in the market?

A

Kevin O'Byrne responds:

First and foremost our investment will be targeted at expanding
the store and digital channels for our existing businesses. We
are planning to increase our organic investment in areas where high
returns are already proven. If we see any opportunities to accelerate
this by acquiring small parcels of stores at the right price, we will act.
As regards anything more meaningful, you can 'never say never', but
we set the hurdles very high indeed when it comes to creating value
for shareholders via acquisition, so it would need to be a great deal.